Homebuy direct or other schemes...whats the process

OMAR

I am looking into these schemes as I want to buy a property ideally at the end of this year/early next year when I should be debt free but not have a heavty deposit.

I have heard on these sites that the process is quite time consuming...so when should I be applying?

If anyone could answer these questions, I'd must appreciate;

- How does it affect your credit file when you apply?
- Whats the time scale?
- How long is it valid for?

Thanks Guys

robfuzzard

- It depends if you get put onto a poor mortgage broker or not. From what I hear, you dont HAVE to get the mortgage through a broker but be careful as some people on here have had a lot of trouble with their credit files because of being rejected for the mortgages for a HBD because the broker has been a dolt. I dont know how it EXACTLY affects it, but hopefully some other users on here will give you exacts.
- So far, we look set to have completed our Hombuy Direct purchase in 2 months, from the moment we first had our check for whether we are eligible, to contract exchange. Not a long process for us, but we might just be lucky.
- What do you mean, how long is it valid for? Do you mean the percentages? We have to start paying the 30% back after 5 years at 1.75%, Then it goes up in increments every year that passes. So on our 6th year we'll pay £73 a month and on the 7th year it'll be £73.36p (roughly).

We've been pretty lucky with ours so far (touch wood!) but my word of advice would be to really take every step of the process slowly and make sure you know what is happening at every moment. We've found that so many parties are involved that at times, you can lose track of where it all is and you can end up getting caught out.

OMAR

like if i apply for HBD.....could I wait 6 months before I find something OR is it right that it is ONLY for newbuilds.....I am meaning the scheme where you dont have a deposit...could i not apply then find my own broker?? or mortgage?

robfuzzard

From what I've seen it isnt JUST for new builds. Around my area there have been some second hand properties that have been advertised as Homebuy Direct. The wait is very dependent on what is available though. We were very lucky with out timing as we walking in the Persimmons sales office and they had one property left for sale, with the build completion date due for December.

I know now that the next houses they are selling are due for completion in April so you could have to wait for a while.

With the broker and mortgage, a lot of the schemes have pre-approved brokers and solicitors you're put on to. With us, we had to be approved by their broker but as for changing to another one after being approved and finding your own mortgage, I dont see why not. Otherwise it does run the risk of being a conflict of interests if they refuse you rights to do so. However, ours has probably gone through quicker because we went with their pre-approved people.

Others might have different experiences and in another thread I can see others have had troubles with the brokers. There are only a few mortgage lenders who deal with Homebuy Direct though so be aware of that.

OMAR

Do you put an offer price in like any other house purchase? and surely if its not just new builds then you can go to any broker/lender?

What mortgage deals were on offer?

Sorry for the umteen questions!!

robfuzzard

You can put in offers. We did. The original price of our place was £209,500 and because we could borrow that much, we offered them £204,000 and they accepted. They will be flexible within reason. Obviously they wont go too much lower on a new build because (and I say this loosely) you are buying high-end, as everything in it is new opposed to being second hand. I think you can even get your own broker/lender if it is a new build, I just dont know how to go about it because we went with their pre-approved broker and he found the best deal for us.

From what I can tell, the best mortgage around at the moment for HBD is RBS at 4.5% with £500 in fee's. I think the other lender who does HBD, and has a good reputation, is Halifax. Not sure I'm being much help as it's been a few weeks since the broker went over the offers with me, and my memory is failing me. Sorry. Dont worry about all the questions though, I just hope I can help in some way.

sgh1976

I can give you what I have gone through. Ours is for a Persimmon New Build. (all the forms suggest you can only buy new builds on this scheme, but as thats what we are buying didn't read much more into it)

We use a Persimmon suggested IFA.
We completed the HBD forms and returned them to him with all the relevent documents. He then has to get a Mortgae pre-approval before sending them to the HBD agent (ours is Orbit)

They say 8 working days to process the application. Ours was 8 weeks.
Once you get the initial letter of acceptance. You sort out the house, return a form to the Agent they then send you a Authorty to Proceed. Once you get that you have 3 months to exchange contracts or the offer from HBD is no longer vaild.

sgh1976

OMAR wrote: »

What mortgage deals were on offer?

I was told last week that RBS have 2 offers for HBD at the mo. One was 3.5% and another 4.5%. But I can't remember what the offers were. Fixed and tracker I think

OMAR

ok cool...thanks for that info guys